Medical Properties, Inc. v. North Dakota Bd. of Pharmacy

• Decision Date: 19 December 1956
• Docket Number: No. 7609,7609
• Citation: 80 N.W.2d 87
• Parties: MEDICAL PROPERTIES, Inc., a corporation, Applicant and Respondent, v. NORTH DAKOTA BOARD OF PHARMACY, Harlan B. Black, Dan Baillie, O. S. Trom, James W. Moore, and George Salaba, being all of the members of such Board, Appellants.
• Court: North Dakota Supreme Court

Page 87

80 N.W.2d 87

MEDICAL PROPERTIES, Inc., a corporation, Applicant and Respondent, v. NORTH DAKOTA BOARD OF PHARMACY, Harlan B. Black, Dan Baillie, O. S. Trom, James W. Moore, and George Salaba, being all of the members of such Board, Appellants.

No. 7609.

Supreme Court of North Dakota.

Dec. 19, 1956.

Syllabus by the Court.

1. While the Board of Pharmacy has power to make rules for the administration of the duties assigned to it by the statute, it has no right to make a rule include any substantive matter not authorized by the statute under which it is acting. Any such new matter would constitute legislation.

2. The legislative power of the government is vested exclusively in the legislature. The legislature cannot delegate that power to any other body.

3. A rule passed by the Board of Pharmacy requiring the stockholders of the corporation owning a pharmacy to be registered pharmacists, is a limitation upon the right of the corporation to own a pharmacy. It affects property rights and ownership and amounts to new legislation.

4. A regulation by the Board of Pharmacy to be valid must not only be consistent with the authority given it by law, but must be reasonable.

5. Regulations passed by the Board of Pharmacy of the State of North Dakota requiring pharmacists to own and have control of the stock of the corporation applying for a permit to operate a pharmacy and asking unreasonable restrictions on the place in which such pharmacy will operate, are void.

Nilles, Oehlert & Nilles, Fargo, for appellants.

Wattam, Vogel Vogel, Bright & Peterson, Fargo, for respondent.

GRIMSON, Judge.

This matter comes before the court under the Administrative Agencies, Uniform Practice Act, Chapter 28-32. The Medical Properties, Inc., a corporation, hereinafter referred to as the applicant, petitioned the North Dakota Board of Pharmacy, hereinafter referred to as the Board, for a permit to establish, operate and maintain a pharmacy in the Dakota Clinic at Fargo, North Dakota, as provided by Section 43-1534, NDRC 1943, as amended by Chapter 290, S.L.1949.

The undisputed evidence shows that the applicant is a corporation organized in connection with the Dakota Clinic. The stockholders of the corporation are the manager and the doctors of the clinic. None of them are pharmacists. The purpose is to provide a pharmacy for the convenience of the patients of the clinic, especially the handicapped ones, so that they can have their prescriptions filled within the building if they desire. The pharmacy is to be operated by a registered pharmacist and under the rules provided by law and the regulations of the Board.

The Board denied the application for a permit on the ground that the applicant was ineligible to operate a pharmacy or drugstore within the City of Fargo because its stockholders were not duly registered pharmacists as required by Rule (k) of the regulation of the Board, and further that the proposed pharmacy did not meet with the requirements of Rule (1) of said regulations and that no circumstances existed to waive such requirements.

The district court on appeal by the applicant found that the regulation (k) is not authorized under the statutes of the State of North Dakota, and, therefore, invalid and void; that regulation (1) is unreasonable and, therefore, invalid and void; that the determination of the Board denying the applicant a permit to operate the pharmacy is not in accordance with the law. The court, thereupon reversed such determination of the Board and directed that the permit to operate a pharmacy be granted to the applicant.

From this determination the Board appeals and assigns as error the findings and conclusions of the court and asks for a trial de novo. The questions raised are the validity of Regulations (k) and (l).

The Board of Pharmacy is an administrative agency. Sec. 28-3201, NDRC 1943. Its duties are to administer the laws of North Dakota regarding pharmacies and drugstores. Chapter 43-15, 1943. It has authority to promulgate reasonable rules and regulations in conformity with the provisions of any statute administered by such agency and to prescribe methods and procedure required in connection therewith.

The powers of the Board of Pharmacy are specifically stated in Section 43-1510, NDRC 1943. Subsection 9 thereof gives it the right 'to prescribe rules and regulations in regard to granting permits and renewals for establishing and operating pharmacies.'

In regard to issuing permits for operating a pharmacy the Board had duly passed Rule (k) which as far as material in this action reads as follows:

'(k) The Board of Pharmacy of the State of North Dakota shall hereafter refuse to grant a permit or license for the operation of pharmacies or drugstores in the State of North Dakota to individuals who are not owners thereof and who are not registered pharmacists in the State of North Dakota or to corporations which are not owned and controlled by pharmacists registered in the State of North Dakota, unless the issuance of permits to other individuals or corporations is a necessity from the standpoint of public health and welfare.'

The Board denied the application because the applicant corporation was not owned and controlled by pharmacists as required by this rule (k). The applicant claims that such regulation is legislative and beyond the power of the Board to enact.

Under the statutes the Board has power to make rules only for the administration of the duties assigned to it by the statute. The Board has no right to make a rule include any substantive matter not included in the statute under which it is acting. Any such new matter would constitute legislation.

The legislative power of the government is vested exclusively in the legislature. The legislature cannot delegate that power to any other body. It is a basic rule of administrative law that administrative regulations which go beyond what the legislature has authorized are void. Wilder v. Murphy, 56 N.D. 436, 218 N.W. 156; State ex rel. Rusk v. Budge, 14 N.D. 532, 105 N.W. 124; 11 Am.Jur., Constitutional Law, Sec. 214, p. 921; Crawford, Statutory Construction, Delegation of Legislative Power, Section 15, p. 24; Rhea v. Board of Education, 41 N.D. 449, 171 N.W. 103; State ex rel. Miller v. Taylor, 27 N.D. 77, 145 N.W. 425; 42 Am.Jur., Public Administrative Law, Sec. 100, p. 429; Manhattan General Equipment Co. v. Commissioner of Internal Revenue, 297 U.S. 129, 56 S.Ct. 397, 80 L.Ed. 528; United States v. George, 228 U.S. 14, 33 S.Ct. 412, 57 L.Ed. 712.

Section 43-1532, NDRC 1943, provides who may engage in the drug business. No conditions of ownership are made. Section 43-1534, NDRC 1943, provides that no person, 'copartnership, association, or corporation shall open, establish, operate, or maintain any pharmacy within this state without first obtaining a permit so to do from the board.' Section 43-1535 provides the proof necessary for the issuance of a permit. Some of those requirements are stated in Subsection 5 as follows: That 'the person, copartnership, association and corporation applying for the permit or renewal is qualified to conduct the pharmacy.' (Emphasis ours.)

It will be noticed that in neither of those sections is there any limitation of the term 'corporations.' The ownership thereof is not mentioned. Any corporation may apply for a permit to establish and maintain a pharmacy under the statute.

The regulation attempts to prescribe the kind of corporation that may apply for a permit to maintain a pharmacy. It establishes a qualification for a corporation to own a drugstore not prescribed by statute. It makes it a condition that any corporation applying for a permit must be...